Journal Entries for Accounts and Notes Payable Logan Company had the following transactions: Apr. 8 Issued a $5,000, 60-day, six percent note payable in payment of an account with Bennett Company. May 15 Borrowed $40,000 from Lincoln Bank, signing a 60-day note at nine percent. Jun. 7 Paid Bennett Company the principal and interest due on the April 8 note payable. Jul. 6 Purchased $12,000 of merchandise from Bolton Company; signed a 90-day note with ten percent interest. Jul. 14 Paid the May 15 note due Lincoln Bank. Oct. 2 Borrowed $30,000 from Lincoln Bank, signing a 120-day note at 12 percent. Oct. 4 Defaulted on the note payable to Bolton Company.
Journal Entries for Accounts and Notes Payable Logan Company had the following transactions: Apr. 8 Issued a $5,000, 60-day, six percent note payable in payment of an account with Bennett Company. May 15 Borrowed $40,000 from Lincoln Bank, signing a 60-day note at nine percent. Jun. 7 Paid Bennett Company the principal and interest due on the April 8 note payable. Jul. 6 Purchased $12,000 of merchandise from Bolton Company; signed a 90-day note with ten percent interest. Jul. 14 Paid the May 15 note due Lincoln Bank. Oct. 2 Borrowed $30,000 from Lincoln Bank, signing a 120-day note at 12 percent. Oct. 4 Defaulted on the note payable to Bolton Company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Logan Company had the following transactions:
| Apr. | 8 | Issued a $5,000, 60-day, six percent note payable in payment of an account with Bennett Company. |
| May | 15 | Borrowed $40,000 from Lincoln Bank, signing a 60-day note at nine percent. |
| Jun. | 7 | Paid Bennett Company the principal and interest due on the April 8 note payable. |
| Jul. | 6 | Purchased $12,000 of merchandise from Bolton Company; signed a 90-day note with ten percent interest. |
| Jul. | 14 | Paid the May 15 note due Lincoln Bank. |
| Oct. | 2 | Borrowed $30,000 from Lincoln Bank, signing a 120-day note at 12 percent. |
| Oct. | 4 | Defaulted on the note payable to Bolton Company. |
Required
a. Record these transactions in general journal form.
b. Record any
Round answers to nearest dollar. Use 360 days for interest calculations.
a.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| Apr.8 |
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| Issued a 60-day, 6 percent note payable in payment of an account payable. | |||
| May 15 |
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| Borrowed from bank for 60 days at 9 percent. | |||
| Jun.7 |
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| Interest Expense |
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| Paid note payable to Bennett Company. | |||
| Jul.6 |
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| Purchased merchandise and issued a note payablewith interest at 10 percent for 90 days. | |||
| Jul.14 |
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| Interest Expense |
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| Paid note payable to Lincoln Bank. | |||
| Oct.2 |
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| Borrowed from bank for 120 days at 12 percent. | |||
| Oct.4 |
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| Interest Expense |
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| Defaulted on note payable. |
b.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| Dec.31 |
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